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protection is not otherwise provided to the satisfaction of the Trustee, it will insure and at all times keep insured, in the amount of the full insurable value thereof, in a responsible insurance company or companies authorized and qualified under the laws of the State of Arkansas to assume the risk thereof, properties of the System, to the extent that such properties would be covered by insurance by private companies engaged in similar types of businesses (but in any event in such amounts as will avoid co-insurance responsibilities) , against loss or damage thereto from fire and other perils included in extended coverage insurance in effect in Arkansas. The insurance policies are to be taken with companies approved by the Trustee, are to carry a clause making them payable to the Trustee as its interest may appear, and are either to be placed in the custody of the Trustee or satisfactory evidence of said insurance shall be filed with the Trustee. In the event of loss, the proceeds of such insurance shall be applied solely toward the reconstruction, replacement or repair of the System, and in such event the City will, with reasonable promptness, cause to be commenced and completed the reconstruction, replacement and repair work. If such proceeds are more than sufficient for such purposes, the balance remaining shall be deposited to the credit of the Water and Sewer Revenue Fund, and if such proceeds shall be insufficient for such purposes the deficiency shall be supplied first from moneys in the Depreciation Fund and second from moneys in the Operation and Maintenance Fund and third from surplus moneys in the Water and Sewer Revenue Fund. Nothing shall be construed as requiring the City to expend any IL moneys for operation and maintenance of the System or for premiums on its insurance which are derived from sources other than the operation of the System, but nothing shall be construed as preventing the City from doing so. Section 18 . Bonds for the payment or redemption of which moneys or Government Securities, as defined in Section 22 hereof, which are not subject to call prior to maturity (except at the option of the holder thereof) shall have been deposited with the Paying Agent (whether upon or prior to the maturity or the redemption date of such bonds) shall be deemed to be paid and discharged; provided, however, that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been duly given or provided for. In determining the sufficiency of the deposit there shall be considered the principal amount of such Government Securities, the dates of maturity thereof and interest to be earned thereon until the maturity of such Government Securities. Section 19 . The City covenants that so long as any Bonds are outstanding, that it will not mortgage, pledge or otherwise encumber the System, or any part thereof or any revenues derived from the operation thereof, except as herein specifically provided, and will not sell, lease or otherwise dispose of any substantial IL portion of the same. Nothing herein shall be construed to prohibit the City from disposing of worn out or obsolete System properties or from disposing of properties not being used and not useful in k\my\b.t.t.on —20—